Gail India Share Price Target: Gail India has been making waves with remarkable returns for investors. As reported by BSE analytics, Over the past month, the company’s shares have surged by an impressive 16.65%, escalating even further to 32.97% in the last three months. The upward trajectory continues with a substantial 52.28% surge in the last six months, a staggering 68% return in the past year, and an astounding 80.30% return over the last two years.
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As of Friday, Gail India’s shares closed at Rs 163.60, marking a modest 0.28% increase from the previous day’s closing. The stock reached its pinnacle on January 1, 2024, touching a 52-week high of Rs 169.35. In contrast, it recorded a 52-week low of Rs 91.05 on February 3, 2023.
Analysts have fine-tuned their earnings estimates for Gail India, anticipating robust financial performance in the fiscal years 2024-2026. Projections include an expected EBITDA/PAT CAGR of 32%/28%, driven by stabilizing global LNG supplies and an improving price environment for commodity businesses. The core gas transmission business is anticipated to contribute significantly to earnings, leading to an enhanced earnings quality. Valuation at 7.5x FY26E EV/EBITDA is deemed reasonable, considering the historical average of 8.4x, anticipated earnings growth, improved RoE at 15.8%, and a healthy dividend yield of approximately 3-4%. The Buy rating is maintained with a revised price target of Rs. 190.
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According to ShareKhan by BNB Paribas, Gail India’s gas transmission business holds multiple growth drivers, with an expected 9% CAGR in gas transmission volume over FY23-26E, reaching 140 mmscmd in FY26E. The petrochemical segment is anticipated to rebound gradually due to improved plant utilization and favorable HDPE prices, while the likely monetization of stake in GAIL Gas could unlock additional value, contributing around 8% (or ~Rs. 15/share) to GAIL’s valuation.
Gail India Share Price TargetThe report recommends a target price of Rs 190 and advises implementing a stop loss at Rs 166 to manage potential risks. Key risks include concerns about LNG supply and a lower-than-expected increase in domestic gas supply impacting gas transmission, marketing, and petrochemical utilization. Additionally, a sharp decline in LNG prices and international oil prices could affect profitability in various segments, while sustained losses in the petrochemical segment may occur in the face of volatility in HDPE and spot LNG prices.
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(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. TN NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
